Tax Savvy Executives

Posted: 15 Feb 2020

See all articles by Thomas R. Kubick

Thomas R. Kubick

University of Nebraska-Lincoln

Yijun Li

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM)

John R. Robinson

Texas A&M University; Texas A&M University - Department of Accounting

Date Written: October 30, 2019

Abstract

We investigate why firms include individuals with significant professional tax experience on their senior management team and the consequences associated with the presence of these tax-savvy senior executives. We find that past performance, network connections, geographic location, and tax rate level relative to industry peers are all significant determinants in having a tax-savvy executive on the senior management team. Using propensity score matching, we find that effective tax rates decrease substantially after a tax-savvy executive is added to senior management and revert following the departure of a tax-savvy executive from senior management. We connect the changes in effective tax rates to changes in the usage of foreign subsidiaries in low tax jurisdictions.

Keywords: corporate taxes, employment history, effective tax rates, professional experience

JEL Classification: G30, G31, G32, H25, M12

Suggested Citation

Kubick, Thomas R. and Li, Yijun and Robinson, John R. and Robinson, John R., Tax Savvy Executives (October 30, 2019). Available at SSRN: https://ssrn.com/abstract=3522815 or http://dx.doi.org/10.2139/ssrn.3522815

Thomas R. Kubick

University of Nebraska-Lincoln ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

Yijun Li

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

John R. Robinson (Contact Author)

Texas A&M University - Department of Accounting ( email )

430 Wehner
College Station, TX 77843-4353
United States

Texas A&M University ( email )

mail stop 4353
Mays School of Business
college state, TX 77843-4353
United States
979-845-3457 (Phone)
979-845-0028 (Fax)

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